Professional Documents
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ST
RA
CT
This
case
anal
ysis
high
light
s
thre
e
maj
or
issu
es in
the
Operatio
nal
Efficiency
-Turnaround time
less than 30
minutes.
-Highest aircraft
utilization in the
Indian domestic
aviation industry
-Single type of
aircraft with fuel
efficient engines.
- On time with
minimum
occurence of
delay
Market
Positionin
g
- Low price but not
low quality.
- No inflight
services which in
turn reduced the
number of cabin
crew members.
-Brand image is
strong and thus
positions Indigo
airlines on the top
of consumer
preferences.
- Focussed only on
high load sectors
1. Innovation
In aviation industry, competitors can quickly imitate the best
practices deployed to achieve the operational efficiency. From an
internal strategy point of view, Indigo should invest in superior yet
cost effective ways of attracting the customers. For example, Indigo
can differentiate itself by providing fast and reliable customer
services. Since Indigo has only one type of airplane, it can leverage
this feature by providing cheaper reallocation options to people who
want to change travel plans.
2. Product Differentiation
Customer loyalty is low in a very cost sensitive aviation market in
India. This problem can be created by adding value to customers in
different ways. Indigo airlines can have complementary partnerships
with hotels to provide holiday packages. This would give Indigo a
first mover advantage in such types of collaborations and help it
create an ecosystem of the value added services to lock its
customers.
3. Sustainability
It is hard to sustain this business only based on pricing strategy. The
scope of product differentiation is less. With growing
commoditization of airline services, Indian aviation industry is not
an attractive market for existing companies. To overcome the issue
of obsolesce, Indigo is targeting fleet expansion for catering to
international routes within 4-5 hours of flying distance. It should
have strategic alliances with other airlines to expand its reach to Far
East Asia or to Europe.
B. Zespri
Zespri has reduced competition and increase profitability in terms of
positioning and differentiation by decommoditize the industry for
standard kiwi fruit. Zespri has horizontally differentiated itself from
other kiwi fruit by virtue of psychological and emotional understanding
of their product. The cost advantage led to 50% to 100% higher
markups. This has given them an ability to innovate and build
collaborations with retailers and growers at the same time and sustain
in the fruit business through economies of scope. However, three major
problems highlighted in the case are as follows:
1. Regular Consumption
Zespri
should come up
with
other
techniques such
jams, juices etc.
deployment
as Zespri
3. Threat of substitution
Horizontal differentiation poses a threat of substitution especially
if markets like China start producing kiwis of same quality as
Zespri but at low costs. It will influence significant market share
of Zespri. For New Zealand government, Zespris export business
is negligible and thus might not get enough government backing.
To overcome this issue, Zespri must invest in knowledge. If there
is a lot of tacit knowledge involved in the business, Zespri will
have a comparative advantage over any company that would try
to imitate and substitute them.
Bibliography
Publishing, D. B. (2013, December 10). The Indigo Story: On time, Hassle Free.